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| Seen above is a sales office of Korea Investment & Securities on Yeouido, Seoul, Tuesday, when the company started receiving applications for a two-day public subscription of shares for SK Bioscience's initial public offering. Yonhap |
By Lee Min-hyung
Local securities firms are being increasingly sought after as main underwriters of planned initial public offerings (IPO) by large companies following the successful public subscriptions of shares in SK Bioscience.
The SK Group affiliate completed a two-day public subscription for its IPO from Tuesday with the amount of deposits reaching a whopping 63.6 trillion won ($56 billion) without assistance from major overseas investment banks.
Foreign institutional investors accounted for 20 percent of the total subscriptions, the results of which surprised industry watchers, as the underwriter group consisted of six Korean securities firms.
It is "very rare" for a large-cap company to engage in the pre-IPO capital-raising procedure without the support of foreign underwriters.
SK Bioscience's successful subscription is raising hopes among domestic securities firms of lifting their overseas sales opportunities.
NH Investment & Securities was the lead manager of the SK Bioscience listing. Korea Investment & Securities and Mirae Asset Daewoo served as back-up underwriters.
"The continuing swirl in local stock markets on hopes of a gradual economic recovery, which in part, stem from the massive launches of stimulus packages alongside low-interest rates bringing investors into the equity market. These factors are attracting more attention from foreign investors, and brokerage firms are also benefiting from the global rise of the KOSPI," an industry source said.
Korean companies have a tendency to prefer well-known global investment banks such as Goldman Sachs, Citi, Bank of Korea-Merrill Lynch and Credit Suisse as financial advisers when it comes to IPOs. In January, LG Energy Solution picked Morgan Stanley as a lead foreign underwriter for its IPO.
"The securities industry in Korea expects more soon-to-be-listed companies to follow in the footsteps of SK Bioscience by relying more on Korean firms' enhanced capabilities in drawing foreign capital," the source said.
SK Bioscience is a contract bio manufacturer and plans to go public on the benchmark KOSPI, March 18. The company set its per-share IPO price at 65,000 won, and its estimated corporate value after the listing will exceed 5 trillion won. A biopharmaceutical business and one of the country's major developers of coronavirus vaccines, SK Bioscience is a wholly owned subsidiary of SK Chemicals and is best known for manufacturing AstraZeneca's COVID-19 vaccine.
